India Plans To Increase Rooftop Solar Subsidy By 5X, To $3.7 Billion

The Indian government is planning to revamp its incentive program for rooftop solar power systems in an attempt to expedite implementation of the capacity across various segments of power consumers.

The Ministry of New & Renewable Energy has proposed a new-look rooftop solar power incentive program that targets commercial, industrial, residential, and institutional consumers. Known as the Sustainable Rooftop Implementation for Solar Transfiguration of India (SRISTI), the program will have a financial support worth Rs 23,450 crore ($3.7 billion) from the government.

The Ministry plans to offer a maximum financial assistance of Rs 18,000 per kilowatt with a maximum covered capacity of 0.5 kilowatts in the residential sector. Similarly, for the institutional, commercial and industrial sector consumers will receive a maximum financial assistance of Rs 5,500 per kilowatt with a maximum covered capacity of 2.62 kilowatts.

Consumers in the commercial and industrial sector will set up 20,000 megawatts of capacity while consumers in the government, residential, social, and institutional sectors will set up 5,000 megawatts of capacity each.

The new proposal would replace the current policy which earmarked Rs 5,000 crore ($770 million) for the rooftop solar power program, a 30 times increase from the preceding planned subsidy. Apart from the nearly 5 times increase in financial support in the latest proposal the government also plans to include commercial and industrial consumers in the subsidy scheme.

The expansion of the the subsidy scheme in terms of total financial support and consumers covered is essential if the government hopes to achieve an installed rooftop solar power capacity of 40 gigawatts by March 2022.

While the utility-scale solar power capacity has grown tremendously over the last few years due to cheaper debt, increased competition, supportive policies, and the fall in module prices, the rooftop solar power sector has significantly lagged behind.

As of the October 31 2017, India had a total installed solar power capacity of 15.5 gigawatts, including just 0.8 gigawatts of grid-connected rooftop capacity. To encourage the residential sector to adopt rooftop solar power systems the government recently proposed a ‘rent a roof’ policy.

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